IFC’s environmental and social due diligence indicates that the investment will have impacts, which must be managed in a manner consistent with the following Performance Standards: PS1 - Social and Environmental Assessment and Management System; PS2 - Labor and Working Conditions; PS3 - Pollution Prevention and Abatement; and PS4 - Community Health, Safety and Security The land required for all its existing assets and the projects in the pipeline, has been acquired through willing buyer/willing seller basis, hence PS5: Land Acquisition and Involuntary Resettlement is not applicable. None of AME project sites (including proposed projects) are located in or near national/provincial/local designated conservation parks. Considering the relatively small footprint of AME projects, the impacts on biodiversity will be very limited, hence PS6: Biodiversity Conservation and Sustainable Natural Resource Management do not apply. No indigenous peoples are/will be affected by AME projects and there are/will be no impacts on any cultural heritage resources. Hence, PS7: Indigenous Peoples and PS8: Cultural Heritage do not apply.

Key environmental and social (E&S) issues associated with this investment include the capacity of the Company to: establish and maintain corporate level E&S assessment and management system; establish and maintain corporate human resource policies and procedures; manage worker health and safety both during construction and operating phases of all projects; ensure compliance and sound labor and safety management by contractors; manage waste discharges and emissions from its operating projects; and ensure health, safety and security of the communities directly affected by the construction and operation of its projects. The Project will result in a limited number of potentially adverse environmental and social impacts which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines, or design criteria. This investment is therefore categorized as B.

The Company has presented plans to address the environmental and social impacts to ensure that its operations upon implementation of the specific agreed measures, comply with the environmental and social requirements including: the host country laws and regulations; IFC’s Performance Standards; and the World Bank Group (WBG)/IFC environmental, health and safety (EHS) guidelines. The information about how these potential impacts will be addressed by the Sponsor is summarized in the paragraphs that follow. Specific information related to IFC’s earlier investment in one of AME’s biomass projects can be found on IFC’s disclosure website under project name Auro Mira Biosys. PS1: Social and Environmental Assessment and Management Systems: - Environmental and Social Assessment: AME has a formal and robust system of assessment of all the potential projects in its pipeline, which covers technical, financial, environmental and social aspects. Formal E&S impact assessment studies are conducted for each project as a part of regulatory approval process – including public consultation if required by local regulations. IFC will periodically review the Company's proposed projects to confirm that the appropriate controls are put in place and the proposed projects comply with IFC’s EHS requirements and at- approval conditions. - Management Program: AME has an Environmental, Health and Safety (EHS) policy at the corporate level, which is adopted by all the projects and facilities in the group. The Head of Quality/EHS for the AME group is responsible for developing and implementing EHS procedures and management systems across group operations. AME’s operating power plant in Pudukottai is ISO 9001 certified and plans to achieve ISO 14001 certification by mid 2010. Similarly, AME has plans to achieve ISO 9001 and ISO 14001 certifications for its T. Kallupatti plant and ISO 9001 certifications for its head office in Chennai and Bangalore office (for hydro power operations) in mid 2010. - Organization: AME has a dedicated senior staff at the corporate level responsible for managing EHS issues across all its operations, and who work with the technical team at each facility. - Monitoring and Reporting: AME has a formal monitoring and reporting system at corporate level, which covers all its facilities and various operational as well as environment, safety related parameters. AME has agreed to review its existing reporting mechanism at corporate level – both for construction and operating phases - vis-à-vis requirements of IFC Performance Standards, EHS Guidelines and reporting requirements. Further, Company will make necessary changes in the monitoring and reporting procedures to comply with IFC requirements. - EHS Management by Contractors: AME manages the EHS aspects of the construction of its projects through requirements imposed on its contractors. In order to ensure sound EHS management of construction of the projects, AME will develop a standard format of EHS related clauses to be included in all the future contracts. With this, AME will require the contractors to develop project specific environmental and social management plans (ESMP) to ensure compliance with environmental and social conditions of the permit and mitigation measures identified in the EIA – including workplace safety. The ESMP will be consistent with the IFC General EHS Guidelines, including the specific sections on environment, occupational health and safety, and community health and safety applicable to the construction phase. PS2: Labor and Working Conditions: - Working Conditions and Management of Worker Relationship: AME group employs around 150 staff based in the corporate office in Chennai as well as at its other project sites and plants. AME has developed a manual documenting the HR policies and procedures, which are in line with the local regulations and IFC PS2 requirements, and covers aspects such as terms of employment, non-discrimination and equal opportunity, grievance mechanism, etc. - Construction Labor Living and Working Conditions: In order to ensure compliance with labor laws including requirements for living and working conditions for contract construction labor, AME will develop a standard format of related clauses to be included in all the future contracts. With this, AME will require the contractors to comply with local labor laws as well as IFC PS2 requirements. AME will implement a formal and documented procedure for monitoring, by its own staff or external consultants as needed, the compliance by all the contractors on various contract clauses related to labor laws, occupational health and safety. PS3: Pollution Prevention and Abatement: - Management of emissions and discharges: The main sources of emissions and discharges are related to project construction activities, which will be managed according to mitigation measures suggested in the environmental permit conditions and IFC’s EHS guidelines. During the operating phase, emissions generated by biomass boilers will be processed through appropriate air pollution control equipment such as electrostatic precipitators (ESP) so that they meet the local regulatory as well as IFC guidelines on emission limits. In accordance with AME corporate guidelines for all its operating assets, ambient air quality monitoring and stack emission monitoring is carried out every six months by AME through external testing agency. In addition, air emissions are monitored once every year by the local pollution control board. All operating facilities are equipped with systems to continually monitor SOx/NOx in stack emissions. Similar monitoring systems will be installed in all the future assets being developed. - Ambient Noise: The impact of noise is expected during construction, including noise from heavy trucks transporting materials to construction sites. No significant noise levels are expected during project operations phase. For its existing operations, AME engages external testing agencies to monitor noise levels every six months and levels are monitored once every year by local pollution control board. - Greenhouse Gases (GHG): AME operates only renewable energy facilities and hence, all projects are expected to result in positive impact with regard to GHG emissions – when compared with coal fired power plants. For the existing assets and active pipeline with a total power generation capacity of approximately 108 MW, AME is expected to abate about 465,000 Tonnes of GHG annually when compared with the normal coal fired power plants. PS4 – Community Health, Safety and Security: In view of the small and clean nature of AME operations, the impact on community health, safety and security are expected to be minimal. Truck traffic to the project sites (primarily for supply of biomass) is expected to be limited, and hence does not pose major safety risks for the nearby communities if any. Storage of biomass may result in fire risk, which is however mitigated by a safety management system in the project design itself. AME has developed On-site Emergency Management Plans for its existing biomass power plants. These plans describe the potential hazards (e.g. fire risk from fuel storage) and the emergency response measures. Similar On-site Emergency Management Plans will be developed for all the future projects. On the basis of the above information, and by implementing the Environmental and Social Action Plan prepared for this investment, it is concluded that the Project will be operated in compliance with IFC’s PS and relevant environmental, health and safety guidelines. IFC will confirm this conclusion through a periodic review of the Company’s E&S due diligence of its projects, and through its regular supervision of the Company’s compliance with IFC requirements.

The Sponsor has been actively engaging with the neighboring communities with its Corporate Social Responsibility (CSR) related programs and activity. In the past, several activities have been organized for the communities nearby the operating projects, which include: assisting the village schools, renovation of the local government building in the village, water supply for villages and tree plantation. In addition, AME is actively engaged with the community and farmers as a part of its supply chain management activities for its biomass power plants. In order to formalize the community disclosure process, AME has agreed to develop a formal and documented grievance mechanism for construction and operating phases as well as plans for community communication and engagement across all its facilities.

Enquiries and/or comments about the Project may be directed to: Mr. R. BALAJEE, Chief Operating Officer (Wind IPP) Auro Mira Energy Company Private Limited Auro Mira House Shafee Mohammed Road, Thousand Lights, Chennai – 600 006, India Ph: + 91 – 44 – 28209800 V.K.VIJAYARAGHAVAN, Vice President-Finance Auro Mira Energy Company Private Limited Auro Mira House Shafee Mohammed Road, Thousand Lights, Chennai – 600 006, India Ph: + 91 –44 – 28209800 Mr. Y. V. KRISHANAM RAJU, GM - Corporate QA&EHS Auro Mira Energy Company Private Limited Auro Mira House Shafee Mohammed Road, Thousand Lights, Chennai – 600 006, India Ph: + 91 – 44 – 28209800